Correlation Between FitLife Brands, and Valic Company

Can any of the company-specific risk be diversified away by investing in both FitLife Brands, and Valic Company at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining FitLife Brands, and Valic Company into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between FitLife Brands, Common and Valic Company I, you can compare the effects of market volatilities on FitLife Brands, and Valic Company and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in FitLife Brands, with a short position of Valic Company. Check out your portfolio center. Please also check ongoing floating volatility patterns of FitLife Brands, and Valic Company.

Diversification Opportunities for FitLife Brands, and Valic Company

-0.07

Correlation Coefficient

FitLife Brands,  Valic Company

Good diversification

The 3 months correlation between FitLife and Valic is -0.07. Overlapping area represents the amount of risk that can be diversified away by holding FitLife Brands, Common and Valic Company I in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Valic Company I and FitLife Brands, is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on FitLife Brands, Common are associated (or correlated) with Valic Company. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Valic Company I has no effect on the direction of FitLife Brands, i.e., FitLife Brands, and Valic Company go up and down completely randomly.

Pair Corralation between FitLife Brands, and Valic Company

Given the investment horizon of 90 days FitLife Brands, Common is expected to generate 5.7 times more return on investment than Valic Company. However, FitLife Brands, is 5.7 times more volatile than Valic Company I. It trades about 0.09 of its potential returns per unit of risk. Valic Company I is currently generating about 0.13 per unit of risk. If you would invest  1,917  in FitLife Brands, Common on August 26, 2024 and sell it today you would earn a total of  1,313  from holding FitLife Brands, Common or generate 68.49% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

FitLife Brands, Common  vs.  Valic Company I

FitLife Brands, Common

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days FitLife Brands, Common has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable essential indicators, FitLife Brands, is not utilizing all of its potentials. The newest stock price disturbance, may contribute to mid-run losses for the stockholders.

Valic Company I

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Valic Company I are ranked lower than 4 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong primary indicators, Valic Company is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with FitLife Brands, and Valic Company

The main advantage of trading using opposite FitLife Brands, and Valic Company positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if FitLife Brands, position performs unexpectedly, Valic Company can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Valic Company will offset losses from the drop in Valic Company's long position.

The idea behind FitLife Brands, Common and Valic Company I pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Transaction History module to view history of all your transactions and understand their impact on performance.